Beware the Earnings Cross, Stock Investors

This was a new one on us, identified by Strategas Research Partners in a note today, and it could be a sign of significant moves in the stock market ahead.

Or not! Your mileage may vary, past performance is no guarantee, et cetera.

An Earnings Cross is when the consensus forecast for next year’s S&P 500 earnings per share falls below the consensus for this year’s EPS, according to Strategas. It was a useful signal in 2001 and 2008/09 that the market was about to go bananas.

The consensus for 2012 earnings has not yet fallen below that for 2011, but it has rolled over and is threatening to break through — possibly as fourth-quarter earnings reports come in and 2012 forecasts get reshaped. Strategas writes:

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